Cost of retained earnings , Financial Management

Assignment Help:

Cost of Retained earnings (K )

Retained earnings are that portion of EPS that is retained by the firm.  This may be measured as the rate of return which the existing share holders can acquire by investing the after-tax dividends in alternative opportunity of equal qualities.

2442_cost of retained earnings.png

Where, K= cost of retained earnings, D = Expected dividend per share, g = rate  of growth in dividends, NP = Net proceeds per share, t = tax rate and b = cost of  purchasing new securities or brokerage costs, and K= rate of return available to share holders.


Related Discussions:- Cost of retained earnings

Operating cycle of company, calculate the operating cycle of company which ...

calculate the operating cycle of company which gives the following details relating to its operations. Particular raw material consumption per annum 842000. Annual cost of producti

20x6 the balances in the several accounts , At the end of March, 20X6 the ...

At the end of March, 20X6 the balances in the several accounts of Nitin & Company are as follows:

Example on interest rate movements, Q. Example on interest rate movements? ...

Q. Example on interest rate movements? Cap/floor volatility is consideration to be higher than swaption volatility because the market buys volatility trough swaptions as well a

Assessment of in individual strengths and weaknesses, Assessment of in indi...

Assessment of in individual strengths and weaknesses Before finalizing career plan for an individual and placing him on career path, it is necessary to access his strengths and

Capital investment decisions, what are the key stages in capital investment...

what are the key stages in capital investment decision-making process and the role of investment appraisal in this process?

What is accumulated depreciation?, What is accumulated depreciation? De...

What is accumulated depreciation? Depreciation is the provision of an asset's initial cost over time.  Accumulated depreciation is the sum of all the depreciation expense that

Apv capital budgeting framework helpful for foreign capital, What makes the...

What makes the APV capital budgeting framework helpful for analyzing foreign capital expenditures? The APV framework is a value- additivity method. As international projects fr

Accounting principles board, Q. Accounting Principles Board ? Accountin...

Q. Accounting Principles Board ? Accounting Principles Board (APB) -senior technical committee of AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS (AICPA) that issued pronoun

Sources of Finance, A regional division of a water company is upgrading its...

A regional division of a water company is upgrading its water filtration & purification plant; the new system is expected to last 20 years & to cost $40m. The parent company has ha

How is present value affected by change in the discount rate, How is presen...

How is present value affected by a change in the discount rate? Present value is inversely associated to the discount rate.  In other words current value moves in the opposite

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd